Today it’s all about pricing and how to get the most out of your licensing costs. In fact, Atlassian Cloud’s tiered pricing gave us a simple and transparent overview of the expected costs – and, thus, important planning reliability.
Atlassian’s licensing policy makes it very easy for companies to get started with Atlassian Cloud. For most products (Jira, Confluence, Bitbucket, Access), costs are based on the number of active users. For startups, small teams, or for evaluation, free licenses are offered with up to ten concurrent users. This makes it very convenient to try out and get started.
As the team grows and more users are added to Atlassian Cloud, several decisions need to be made. On the one hand, whether payment should be made monthly or annually. On the other hand, which plan (Standard, Premium, Enterprise) fits individual needs for security, storage, and support. We will use examples to look more thoroughly at the advantages of the various options.
For this purpose, we’ll use the following table:
This table compares the plan and the billing method, based on different user counts. Red and green show which alternative is cheaper in each case. Thus, it can be quickly seen that the monthly and annual billing methods are always alternately cheaper. But why is that?
For annual billing, the calculation is not based on the number of active users, but on predefined user bands. In the example, the following bands are used:
- 10 – 15 users
- 16 – 25 users
- 26 – 50 users
- 51 – 100 users
- 101 – 200 users
Whenever the number of users reaches the end of a band, the annual billing method becomes cheaper than the monthly billing method. As an approximate guideline, it can be said that if 80% of the respective band maximum is reached, the annual billing method will be cheaper than the monthly billing method. In the table, this can be seen, for example, in the steps from 41 to 42 or from 83 to 84 users. But what does this mean for planning? Let’s look at three examples where a company is using Atlassian Jira software with the default plan.
Example 1: Initially, 35 users are required and each month, one additional user is added. Now let’s compare monthly and annual billing.
Although the number of users exceeds the threshold of 42 users, the monthly plan is cheaper in this case because the average number of users over the whole year is 40.5, which is lower than 42.
Example 2: But what about if we start with 39 users instead of 35?
The average number of users increases from 40.5 to 44.5 in the second example, making annual billing cheaper than monthly billing. This example also shows that annual billing with 50 users comes exactly to the user threshold.
In a third example, let’s take a look at what would happen if we started with 46 users.
After only 5 months, the user scale for annual billing reaches its limit and an upgrade to the next higher band is necessary. The annual upgrade cost of $7,000 is invoiced proportionally over the rest of the year. This represents an additional cost of $2,916.67 for the remaining 7 months, which brings the total cost to $6,416.67 – a large increase in cost.
What can we take away from these examples?
The threshold value of the number of users above which annual billing is cheaper than monthly billing is about 80% of the respective band maximum. With few users, this threshold is quickly reached and the monthly plan is usually recommended for small user groups. On the other hand, for larger user bands, e.g. from 101 – 200 users, the annual plan may pay off, since the band maximum is not reached so quickly after the threshold is exceeded.
Of course, license fees are not the only costs to be reckoned with. There are also costs for the initial setup and application support. These costs depend largely on the requirements and can therefore not be generalized.
If you would like a customized estimate of what it will cost you to set up and run Atlassian Cloud, please contact us! We would be happy to advise you on your project.